Gold Miners Report Strong Earnings; Own Them In This ETF

April 29th at 3:00pm by Tom Lydon

gold miner ETFsA bevy of gold miners reported first-quarter earnings this week, and the results were nothing short of stellar. If you’re looking to ride the current gold rush, you may want to consider gaining exposure through gold-miner related exchange traded funds (ETFs).

Newmont Mining (NYSE: NEM), Goldcorp (NYSE: GG) and Barrick (NYSE: ABX) all reported earnings this week, and they didn’t disappoint:

  • Newmont Mining’s profits soared in the first quarter, thanks to higher gold and copper prices, as well as increased production. [Why Gold Miner ETFs Are Striking While the Iron Is Hot.]
  • Revenues at Goldcorp rose 20% from a year earlier, and gold production increased as well.
  • Barrick notched record profits in the first quarter, doubling its income on increased production, as well as gold and copper sales. Gold production soared 19%  in the first quarter.

Don Dion for TheStreet recently noted that these three companies make up 38% of assets in Market Vectors Gold Miners (NYSEArca: GDX).

A few of the fundamentals supporting gold these days include:

  • Inflation fears still hovers in the minds of many an investor and gold is considered an adequate way to hedge against that risk.
  • Economic strength in emerging markets such as China and India means that consumers have more income to sate their gold demands.
  • The recent financial problems in Europe that stem from Greece’s budget problems and the rest of the continent’s link to the mess as a result of the euro has also brought gold to new all-time highs against the currency. [Why Gold Miner ETFs Are Outperforming Gold.]

If you’re more risk-tolerant, you may want to consider a small-cap approach to gold miners through Market Vectors Junior Gold Miners (NYSEArca: GDXJ). The fund has high daily trading volumes, but it’s a little more volatile than GDX.

For more information on gold miners, visit our gold miners category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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